Three Freight Things to be Thankful for in 2022
November 22, 2022 •Kevin Baxter
For those involved in freight and logistics, when it comes their turn at the Thanksgiving table in a couple of days, it may be a struggle to relay something to be thankful for this year. After all, it can be difficult for anyone whether there are too many options or too few. And this year, it's probably feeling to many freight pros like there aren't a lot to choose from. With labor unrest on the rails and at the ports, inflation, high fuel costs and recessionary concerns and relatedly, a peak season that's been anything but for both volume and rates, there are certainly reasons to think that way. But Thanksgiving is a time to appreciate what you have, not fret about what you don't. With that in mind, here are three freight things to be thankful for that are free for anyone to use between bites of turkey and mashed potatoes.
No more port backups
At this time last year, one of the biggest headlines (and headaches) in freight and logistics involved cargo ships full of imported goods unable to reach American shores due to major backups at major West Coast ports like Los Angeles and Long Beach. Thankfully, the ports are running smoothly again and the sight of dozens of ships waiting for days off the coast to offload their cargo is but a memory. The reasons are numerous, as the ports worked to streamline operations and add container staging/storage space, carriers diverted ships to other ports as far as the East Coast and, perhaps the biggest reason: Shipping volume has dropped. Ocean carriers have set a number of blank sailings due to lower consumer demand for freight and to stem lower freight rates. With fewer imports coming in, it's given the ports a chance to catch up from what once was a peak of over 100 ships waiting off the coast to virtually none now. That means, unlike last year at this time, products meant to see store shelves before Christmas are not stuck at sea, so shortages are much less of an issue. And back to that second factor of diverting ships, ports like New York and Houston remain plenty busy even with a general freight slowdown.
Capacity and quality improvements, and lessons learned
Admittedly, you may be sensing a glass half-full outlook on the current situation, but even still, it is important to note that available capacity has increased exponentially. That certainly makes life easier for shippers following a prolonged period in which finding a way to move products was, let's just say, not easy. But in the long run, this may also be good for the freight industry as a whole. The supply chain-crunch period of about two years from summer 2020 to spring 2022 revealed some shortcomings that are now being addressed. For instance, trucking companies were forced to use older, less efficient vehicles just to keep up - and in many cases even with those pressed into service, they could not. That meant lower profit margins due to fuel and maintenance costs, as well as an inability to handle all the incoming freight requests. Now, carriers are expanding/updating their fleets, so that even if there is a temporary slowdown, they'll be better prepared for the next peak period (and better handle the higher gas prices that are currently an issue). The crunch of the pandemic also led to more containers being built, turning what was a shortage into a scenario now where some say there are too many. As the situation normalizes, this container volume will allow the retirement of containers that were pressed into service during the pandemic, avoiding shipments affected by leaks or other faults. Chassis availability is still catching up, but again, the challenges brought forth during the heaviest periods have led to action on building more which should increase capacity and improve what is in circulation when all is said and done. And another lesson had to do with shortages of warehouse space, an issue that's still being worked on. At any rate, be thankful that lessons have been learned and many challenges have been or are being addressed.
The freight market rewards creativity, service
Coming off a pandemic period in which the industry dealt with challenges galore, it's a good time to take stock of how things stand now. Just as lessons have been learned regarding equipment, so too have lessons been learned in terms of who handled the peak freight market challenges and who can handle the sort of opposite end of the spectrum today. Two words stand out: creativity and service. Shippers have appreciated third party logistics (3PL) companies that found a way to make things work for them in the toughest of times - getting their loads where they needed to go, when they needed them when the word deadline became more of a nice to have. If the traditional methods weren't working, a 3PL who could pivot from truckload to intermodal or from port to port was invaluable. And even today while things are running more smoothly in many regards, creativity is a necessity to ensure freight moves most efficiently, to keep accessorials and other additional charges to a minimum and to navigate spot and contract rates for the best long-term solution to the service and cost equation. In other words, be thankful for creative, service-oriented partnerships.
At InTek Freight & Logistics, we're thankful for our customers - past, present and future - and our carrier partners. And we'd be happy to work with you on creative solutions to your freight needs. Request a quote now, and we'll be happy to discuss how we can help with your unique needs. Get more information about freight and logistics - and what we do at InTek - at our Resources page. Or you can start with a few of the links below:
- Domestic Freight Services: Intermodal, Truckload, LTL
- Outsourced Managed Transportation Service Solutions